I am sometimes asked by potential clients that they would like me to prepare a “simple” Will for them. And I often wonder how the person knows that they require a simple Will.  Furthermore, what is considered a simple Will anyway? Isn’t asking for a simple Will similar to walking into a car repair shop and telling the mechanic “Hey, my car will not run. I would like a simple repair please.”

Your Will may be a simple matter. True. But it may not be. And you as the potential client may not be in the best position to judge this. A number of factors go into potentially complicating an estate plan. As just a few examples, second or troubled marriages tend to complicate things; step children in the family can complicate things; disinheriting potential heirs can complicate things; minor or disabled persons as potential beneficiaries complicates things, missing heirs can complicate things; potential estate tax liability can complicate things; potential income tax liability on retirement accounts can complicate things; and so on.

When you go to an attorney for estate planning services, these are the types of issues that will be dealt with. In each of the above scenarios, a simple Will likely may not be sufficient to protect you, your assets, and your family. While the final estate planning product may appear to be simple, when you are considering protecting your family and your assets, the process to arrive there should not be simple, it should be thoughtful and well-considered.

That is what I would like to be asked for. “A thoughtful and well-considered estate plan.”

Like any decent lawyer, I need to add a disclaimer here: unfortunately, it is impossible to offer comprehensive legal advice over the internet, no matter how well researched or written. And remember, reviewing this website and my blogs doesn’t make you a client of my Firm: before relying on any information given on this site, please contact a legal professional to discuss your particular situation.

Installment D of A - Z is DISCLAIMER.

Internal Revenue Code section 2518 allows a South Carolina beneficiary to execute a qualified disclaimer, resulting in transmission of the disclaimed property as if the disclaimant had predeceased the decedent. Utilizing disclaimers as part of the estate plan builds in flexibility.  This technique can be used in the context of disclaimer trust planning for estate tax purposes, or in the context of IRAs and qualified plan transmission to accomplish favorable income tax treatment, to describe but a few uses.

Treasury Regulation section 25.2518-2 lists the following “Requirements for a Qualified Disclaimer”.

(a) In general. For the purposes of section 2518(a), a disclaimer shall be a qualified disclaimer only if it satisfies the requirements of this section. In general, to be a qualified disclaimer—

(1) The disclaimer must be irrevocable and unqualified:

(2) The disclaimer must be in writing;

(3) The writing must be delivered to the person specified in paragraph (b) (2) of this section within the time limitations specified in paragraph (c)(1) of this section;

(4) The disclaimant must not have accepted the interest disclaimed or any of its benefits; and

(5) The interest disclaimed must pass either to the spouse of the decedent or to a person other than the disclaimant without any direction on the part of the person making the disclaimer.

The use of qualified disclaimers should be carefully thought out, and quite frankly, should only be utilized under the supervision of an attorney or tax professional. Disclaimers can be tricky. I have heard the following horror story arise from the uninformed use of disclaimers: A man died without a Last Will. Under SC intestacy law, the beneficiaries of the estate were to be the man’s surviving spouse and his two children. The two children wanted to do the “right thing” by their mother and signed a disclaimer of their inheritance.

The problem? Well, the two children had children of their own. When you disclaim an inheritance, the disclaimed property is treated as though the disclaimant predeceased the Decedent. In this case, under South Carolina’s anti-lapse statute, the inheritance that was disclaimed did not go to the Disclaimants’ mother but instead went to the disclaimants’ children. Making things worse was that the disclaimants’ children were minors, who would have a guardian ad litem appointed for them by the Probate Court to protect their newly created property interests.

The moral of the story is that qualified disclaimers of property should only be undertaken under the supervision of an experienced estate attorney who will carefully analyze the law to determine where the disclaimed property would go after the disclaimer is made.

Like any decent lawyer, I need to add a disclaimer here: unfortunately, it is impossible to offer comprehensive legal advice over the internet, no matter how well researched or written. And remember, reviewing this website and my blogs doesn’t make you a client of my Firm: before relying on any information given on this site, please contact a legal professional to discuss your particular situation. 

One question that can come up when administering an estate is whether a caregiver can be entitled to be compensated from an estate for services rendered to the Decedent before death. Often what happens is a family member or significant other serves as a caregiver believing that he or she will be compensated via a bequest from the Decedent’s estate. After the Decedent passes away, the caregiver discovers that there was in fact no bequest made to them.  In that case, is there a right to recover for caregiving services from the estate?

Yes, there is such a right, but it is pretty narrowly drawn. The Courts of South Carolina have dealt with this issue.  The right to recover is through a contract right called quantum meruit, or unjust enrichment. The South Carolina Supreme Court defined this right generally in Myrtle Beach Hospital, Inc. v. City of Mrytle Beach, when it said that quantum meruit requires “1) a benefit conferred by the plaintiff upon the defendant; 2) the realization of that benefit by the defendant; and 3) retention of the benefit by the defendant under circumstances that make it inequitable for him to retain it without paying its value.” 341 S.C. 1, 8-9 (2000).

This seems pretty encouraging for our hypothetical caregiver. But not so fast. The Supreme Court further required in Sauner v. Public Service Authority of South Carolina, that the services must be given non-gratuitously. 354 S.C. 397, 409 (2003). Now here is the problem for our caregiver. Most of the time a caregiver provides care because of some familial blood relation or love and affection.  Thus, the caregiver acts gratuitously, not expecting any compensation for their work.

This was the case in Church v. McGee, et al, where the Court of Appeals recently held that a caregiver could not receive compensation from an estate because the caregiver’s own testimony supported the finding that the caregiver did not expect compensation for the services.

It is likely the Circuit Court would have held differently had there been a written contract in place between the caregiver and the Decedent regarding monetary compensation to be paid from the estate.  This raises an interesting question as well. Can you agree via contract to make a bequest to a certain person? Is such a contract enforceable? Stay tuned for a future post……..        

Like any decent lawyer, I need to add a disclaimer here: unfortunately, it is impossible to offer comprehensive legal advice over the internet, no matter how well researched or written. And remember, reviewing this website and my blogs doesn’t make you a client of my Firm: before relying on any information given on this site, please contact a legal professional to discuss your particular situation.

The death of another celebrity has apparently led to more estate litigation and bickering about who is entitled to the assets left behind. Gary Coleman died on May 28, 2010.  The reporting is raising some interesting issues for probate lawyers.  The bare bone facts, as reported by various news outlets, appear to be as follows:

1. Gary Coleman executes a Last Will and Testament in 1999 and a new Last Will in 2005.

2. Gary Coleman marries Shannon Price on August 22, 2007. Neither the 1999 nor 2005 Last Wills mentions Ms. Price, naturally.

3. In the end of 2007, Gary Coleman executes a Codicil (Amendment) to his 2005 Last Will, giving his entire estate to Ms. Price.

4. Gary Coleman and Ms. Price divorce on August 12, 2008, but apparently continue living together until his death on May 28, 2010.

While the Gary Coleman estate will in reality be subject to the laws of the state of Utah, there are several scenarios that could play out under South Carolina law with this set of facts.  (Click here for more…)

If you have read any of my previous posts, surely you know that there is no federal estate tax in the year 2010.  Unsurprisingly, this change in the law can have severe repercussions for your estate plan.

Some estate planners are sounding the alarm with regard to estate plans based on credit shelter family trusts and marital deduction trusts.  These trusts are set up in such a way that the credit shelter trust gets funded with assets up to the amount that will not be subject to estate tax due to the previously existing estate tax exemption, while the marital deduction trust gets everything else.  (This set up eliminates all federal estate tax when the first spouse passes away.)

The problem with this set up is that (Click here for more…)

“Why can’t I just take a copy of the Revocable Trust to the bank and have them give me the money in the account”, asks your client.  “The trust says that I am the beneficiary.”

My answer to this is always (Click here for more…)